Manchester United : 1Q22 Earnings Release

CORPORATE RELEASE

17 November 2021

Manchester United PLC Reports

First Quarter Fiscal 2022 Results

MANCHESTER, England - 17 November 2021 - Manchester United (NYSE: MANU; the "Company" and the "Group") - one of the most popular and successful sports teams in the world - today announced financial results for the 2022 fiscal first quarter ended 30 September 2021.

Ed Woodward, Executive Vice Chairman, commented, "While these financial results today demonstrate our resilience through the pandemic, our top priority is success on the pitch. The manager, players and everyone at the club are determined to achieve that objective."

Key Financials (unaudited)

	Three months ended
£ million (except loss per share)	30 September
	2021	2020	Change
Commercial revenue	64.4	59.7	7.9%
Broadcasting revenue	43.3	47.6	(9.0%)
Matchday revenue	18.8	1.7	1005.9%
Total revenue	126.5	109.0	16.1%
Adjusted EBITDA(1)	11.2	20.8	(46.2%)
Operating loss	(10.2)	(27.1)	(62.4%)
Loss for the period (i.e. net loss)	(15.5)	(30.3)	(48.8%)
Basic loss per share (pence)	(9.53)	(18.58)	(48.7%)
Adjusted loss for the period (i.e. adjusted net loss)(1)	(12.5)	(24.6)	(49.2%)
Adjusted basic loss per share (pence)(1)	(7.67)	(15.12)	(49.3%)
Non-current and current borrowings(2)	538.4	499.5	7.8%
Cash and cash equivalents(2)	98.7	58.9	67.6%
Net debt(1)/(2)	439.7	440.6	(0.2%)

1. Adjusted EBITDA, adjusted loss for the period, adjusted basic loss per share and net debt are non-IFRS measures. See "Non-IFRS Measures: Definitions and Use" on page 7 and the accompanying Supplemental Notes for the

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definitions and reconciliations for these non-IFRS measures and the reasons we believe these measures provide useful information to investors regarding the Group's financial condition and results of operations.

1. The gross USD debt principal remains unchanged. Non-current and current borrowings and cash and cash equivalents as of 30 September 2021 reflect the impact of a £60.0 million drawdown on our £200 million revolving credit facilities during the second quarter of fiscal 2021.

COVID-19 Impact

Due to remaining summer restrictions on overseas travel, we did not undertake a first team overseas tour at the start of fiscal 2022, and instead we played four domestic games, two of which were held at Old Trafford. Whilst the nature of the ongoing pandemic may result in UK government restrictions being re-imposed in the future, the majority of such restrictions were lifted ahead of the start of the 2021/22 season, with Old Trafford stadium welcoming back fans at full capacity.

Phasing of Premier League games	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Total
2021/22 season*	6	14	10	8	38
2020/21 season	2	13	14	9	38
2019/20 remaining season	6	-	-	-	6
Total FY 2021	8	13	14	9	44
2019/20 season	7	13	9	3	32

*Subject to changes in broadcasting scheduling

Revenue Analysis

Commercial

Commercial revenue for the quarter was £64.4 million, an increase of £4.7 million, or 7.9%, over the prior year quarter.

• Sponsorship revenue was £36.3 million, a decrease of £0.2 million, or 0.5%, over the prior year quarter.
• Retail, Merchandising, Apparel & Product Licensing revenue was £28.1 million, an increase of £4.9 million, or 21.1%, over the prior year quarter primarily due to increased Megastore footfall as a result of home games being played in front of a full capacity crowd, combined with the impact of new player signings. In the prior year quarter all home games were played behind closed doors.

Broadcasting

Broadcasting revenue for the quarter was £43.3 million, a decrease of £4.3 million, or 9.0%, over the prior year quarter, primarily due to playing four fewer home and away games across domestic competitions, due to the completion of the 2019/20 Premier League and FA Cup competitions during the prior year quarter. This is partially offset by the impact of playing two UEFA Champions League games in the current quarter compared to three UEFA Europa League games in the prior year quarter (relating to completion of the 2019/20 UEFA competition).

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Matchday

Matchday revenue for the quarter was £18.8 million, an increase of £17.1 million, or 1005.9%, over the prior year quarter, due to all five home games being played in front of a full capacity crowd. All five home games in the prior year quarter were played behind closed doors.

Other Financial Information

Operating expenses

Total operating expenses for the quarter were £154.1 million, an increase of £30.6 million, or 24.8%, over the prior year quarter.

Employee benefit expenses

Employee benefit expenses for the quarter were £88.5 million, an increase of £16.6 million, or 23.1%, over the prior year quarter due to investment in the first team playing squad.

Other operating expenses

Other operating expenses for the quarter were £26.8 million, an increase of £10.5 million, or 64.4%, over the prior year quarter. This includes the impact of all home games being played in front of a full capacity crowd and costs related to the increased activity at the Old Trafford Megastore. In the prior year quarter all home games were played behind closed doors.

Depreciation and amortization

Depreciation for the quarter was £3.7 million, a decrease of £0.1 million, or 2.6%, over the prior year quarter. Amortization for the quarter was £35.1 million, an increase of £3.6 million, or 11.4%, over the prior year quarter. The unamortized balance of registrations at 30 September 2021 was £422.5 million.

Profit/(loss) on disposal of intangible assets

Profit on disposal of intangible assets for the quarter was £17.4 million, compared to a loss of £12.6 million for the prior year quarter.

Net finance (costs)/income

Net finance costs for the quarter were £9.6 million, compared to net finance income of £nil in the prior year quarter, primarily due to an unfavourable swing in unrealized foreign exchange movements in the current quarter compared to a favourable swing in the prior year quarter.

Income tax

The income tax credit for the quarter was £4.3 million, compared to an income tax expense of £3.2 million in the prior year quarter.

Cash flows

Overall cash and cash equivalents (including the effects of exchange rate movements) decreased by £12.0 million in the quarter to 30 September 2021 compared to the cash position at 30 June 2021.

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Net cash inflow from operating activities for the quarter was £63.6 million, compared to net cash inflow from operating activities in the prior year quarter of £62.3 million.

Net capital expenditure on property, plant and equipment for the quarter was £3.7 million, an increase of £1.9 million over the prior year quarter.

Net capital expenditure on intangible assets for the quarter was £61.1 million, an increase of £9.5 million over the prior year quarter.

Net cash outflow from financing activities for the quarter was £11.1 million, an increase of £10.7 million over the prior year quarter. Current quarter cash outflow includes a semi-annual cash dividend of $0.09 per share paid on 30 July 2021.

Net debt

Net Debt as of 30 September 2021 was £439.7 million, compared to £440.6 million as of 30 September 2020. As of 30 September 2021, the Company had undrawn credit facilities of £140.0 million.

Dividend

A semi-annual cash dividend of $0.09 per share will be paid on 7 January 2022, to shareholders of record on 1 December 2021. The stock will begin to trade ex-dividend on 30 November 2021.

About Manchester United

Manchester United is one of the most popular and successful sports teams in the world, playing one of the most popular spectator sports on Earth. Through our 143-year football heritage we have won 66 trophies, enabling us to develop what we believe is one of the world's leading sports and entertainment brands with a global community of 1.1 billion fans and followers. Our large, passionate and highly engaged fan base provides Manchester United with a worldwide platform to generate significant revenue from multiple sources, including sponsorship, merchandising, product licensing, broadcasting and matchday initiatives which in turn, directly fund our ability to continuously reinvest in the club.

Cautionary Statements

This press release contains forward-looking statements. You should not place undue reliance on such statements because they are subject to numerous risks and uncertainties relating to the Company's operations and business environment, all of which are difficult to predict and many are beyond the Company's control. Forward-looking statements include information concerning certain expectations and uncertainties related to the COVID-19 pandemic and the Company's possible or assumed future results of operations, including descriptions of its business strategy. These statements often include words such as "may," "might," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "seek," "believe," "estimate," "predict," "potential," "continue," "contemplate," "possible" or similar expressions. The forward-looking statements contained in this press release are based on our current expectations and estimates of future events and trends, which affect or may affect our businesses and operations. You

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should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions. Although the Company believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect its actual financial results or results of operations and could cause actual results to differ materially from those in these forward-looking statements. These factors are more fully discussed in the "Risk Factors" section and elsewhere in the Company's Registration Statement on Form F-1, as amended (File No. 333-182535) and the Company's Annual Report on Form 20-F (File No. 001-35627).

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